| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : HALGE -v- GEORGE [2003] WADC 52 CORAM : LA JACKSON DCJ HEARD : 30, 31 JANUARY, 6, 7 FEBRUARY 2003 DELIVERED : 11 MARCH 2003 FILE NO/S : CIV 169 of 2002 BETWEEN : TERENCE FREDERICK BERTRAM HALGE Plaintiff
AND
SUKKUMAR GEORGE
Defendant
Catchwords: Breach of contract for sale of land in India - Claim for unpaid purchase price - Counterclaim for breach by misrepresentation or deceit
Legislation: Nil
Result: Claim and counterclaim dismissed
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Representation:
Counsel:
Plaintiff : Mr M D Cuerden
Defendant : Mr M Hawkins
Solicitors:
Plaintiff : Scott & Kaminickas
Defendant : Friedman Lurie Singh
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
Damberg v Damberg (2001) 52 NSWLR 492
Derry v Peek (1889) 14 App Cas 337
McDonnell & East Limited v McGregor (1936) 56 CLR 50
Morgan v 45 Flers Avenue Pty Ltd (1987) 5 ACLC 222
Pearmine v R [1988] WAR 315
Ted Brown Quarries Pty Ltd v General Quarries (Gilston) Pty Ltd (1977) 16 ALR 23
TN Lucas Pty Ltd v Centrepoint Freeholds Pty Ltd (1984) 1 FCR 110
Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd (1998) 193 CLR 603
Wardley Australia Ltd v The State of Western Australia (1992) 175 CLR 514
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1 LA JACKSON DCJ: The plaintiff's claim is for $210,804 being the unpaid balance of the purchase price of land sold by the plaintiff to the defendant. The defendant claims to have paid and further counterclaims for about $200,000 for damages for misrepresentation or deceit.
2 The plaintiff was the owner of land in a new residential housing estate in Madras in India. He had been allocated the land because of his service as an Indian Army officer. A condition of the granting of the land was that a residence had to be built on it. The plaintiff retired from the Indian Army in 1968 aged 50 and built a one bedroom flat on the land to comply with the requirements. 3 In 1969 the plaintiff left India and came to Australia with the intention of living and working in Australia for the next 15 years or so before returning to India to build a more substantial dwelling on the land and to retire there. He left his brother-in-law and his family in occupation of the flat. 4 In 1983 the plaintiff returned to India and visited the property. He discovered a large shed had been erected on the front of the property from which a car repair business was being carried on. He also discovered two other buildings had been erected on the property. These had been done with his brother-in-law's consent but without the plaintiff's knowledge. 5 The plaintiff attempted to have the tenants evicted through legal proceedings but was unsuccessful and the occupier of the car repair business one Mr P Narayanan obtained an injunction to restrain the plaintiff from taking action (other than court action) to remove him. He decided to sell the land. 6 In 1995 the plaintiff was introduced to the defendant who was a property developer in Madras. Both the plaintiff and the defendant resided in Perth. The defendant says the plaintiff told him of the occupiers of the land but said they were mere trespassers who could easily be removed. The defendant says he relied upon that information and entered into a contract to purchase the land. 7 The plaintiff says at all times he advised the defendant of the true position including the fact that there had been court proceedings which had ended favourably for Narayanan. For the reasons set out later in this decision, I accept the plaintiff's evidence. 8 Whatever the plaintiff told the defendant about the occupiers, in my opinion, the defendant did not rely on it. He went to India in 1995 to find
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out for himself. He was an experienced property developer who knew the potential difficulties of getting rid of someone on the land. 9 When he went to India he visited the property. He said the occupiers refused to speak to him. He said he attempted to obtain information from the TamilNadu Housing Board but they also would not give him information. When the defendant went to India he had with him a letter from the plaintiff authorising him to deal with the property. But it was not in the proper form of a power of attorney and hence the difficulty. Instead of telephoning the plaintiff and asking him for a proper power of attorney the defendant returned to Australia. 10 In my opinion the defendant by his actions showed he was not relying upon what he had been told by the plaintiff when he decided to enter into the contract to purchase the land. It may well be that his investigations in Madras were inadequate but that is his lookout. 11 On 9 December 1995 the parties executed an agreement of sale. The agreement was prepared by the defendant's solicitors in Madras. Its terms are, I think, consistent with the knowledge by the defendant of the occupiers and an acceptance by him that it was his responsibility to do whatever was necessary to have them removed from the land. Included in the recitals are the following paragraphs: "WHEREAS the TamilNadu Housing Board called upon the VENDOR herein to remove a shed which was put up on the schedule mentioned property before executing the sale deed in his favour. WHEREAS the PURCHASER has called upon the VENDOR to evict the persons in occupation of the said property and to handover vacant possession of the schedule mentioned property before payment of the entire sale consideration, WHEREAS the VENDOR herein requested the PURCHASER to initiate legal proceedings and take such other steps as may be necessary to evict the persons who are at present occupying the schedule mentioned property. WHEREAS the PURCHASER has agreed to do so and the entire cost and expenses to be incurred for getting vacant possession of the schedule mentioned property is borne by the PURCHASER."
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12 The plaintiff is the vendor and the defendant the purchaser. It is clear that there is an acceptance of the need to "initiate legal proceedings" to evict the occupiers.
13 In his evidence the defendant said, and I accept, that in the case of a mere trespasser with no legal claim on the property, the owner of the property can have such trespassers evicted by simply requesting the police to do so. Some money was needed to be paid to the police for this service but there were no legal proceedings which would be required. Where persons are in occupation of land with some claim of right, then legal proceedings are necessary to evict them. Legal proceedings in India can be long and expensive. It was therefore a matter of some importance to clearly set out whose responsibility it was to evict the occupiers. In my opinion the recitals do just that. Paragraph 3 of the deed provides as follows: "3) The PURCHASER shall pay the balance sale consideration of Rs.59,50,000/- (Rupees fifty nine lakhs fifty thousand only) within a period of 6 months from the date of the VENDOR getting the Pucca Sale Deed in his favour from the TamilNadu Housing Board and in obtaining vacant possession of the schedule mentioned property and within a period of 6 months from the date of the VENDOR obtaining the 'NO-OBJECTION' Certificate from the Appropriate Authority, Income Tax Department under Section 269 UL(1) of the Income Tax Act." 14 The underlined words had been crossed out and initialled by both parties. This is a further indication of the acceptance by the defendant that it was not the responsibility of the plaintiff to obtain vacant possession but was his. 15 Clauses 5 and 6 of the agreement make it clear it is the defendant's responsibility to remove the occupiers. They provide: "5) The VENDOR shall execute a Power of Attorney in favour of the PURCHASER or its nominees for the purpose of evicting the persons occupying the schedule mentioned property to enable them to enter into agreements of sale, sale deeds, etc., with third parties and also to do various things relating to the schedule mentioned property.
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6) The PURCHASER shall take all steps to evict the persons occupying the schedule mentioned property." 16 Clause 16 provides: "The VENDOR shall handover vacant possession of the Schedule mentioned property to the PURCHASER on receipt of the entire sale consideration." 17 This clause is inconsistent with the clear agreement by the parties that it is the purchaser's responsibility to have the occupiers removed. It appears to be a standard clause in such a contract and was probably overlooked. 18 After the defendant signed the agreement and got a power of attorney from the plaintiff, he returned to India. It appears he there found it was a bit more complicated than he had thought. He therefore asked the plaintiff to set out in detail the history of the property. Although the plaintiff cannot remember why he was asked to do it, it is clear that a handwritten document dated 21 February 1996 was prepared by him. It is consistent with a request by the defendant for the plaintiff to provide him with a detailed history of the land and the occupants. The plaintiff says he always told the defendant of the true picture. The statement, written two months after the agreement, is the true picture. I do not accept that the plaintiff would, in that short time, have changed the story he was telling the defendant. In my opinion the plaintiff is an honest person. He now, because of age (aged 84 at trial), cannot remember many things but in 1995 he well knew of the true situation of the occupiers. In my opinion he always told the defendant. The defendant complains that the statement still asserts that the occupiers are trespassers and fails to state that an injunction has been obtained. That the injunction was obtained was a fact known to the plaintiff. He still maintains that the occupiers were trespassers and does not consider the injunction should have been granted. He blames inaction on the part of his lawyers for that occurrence. The statement clearly says "The case was heard and decreed against me". After Narayanan had obtained his court order he offered the plaintiff Rs.10.00 Lakhs for the property. In the statement the plaintiff says the property was clearly worth seven or eight times as much as that. 19 The plaintiff and the defendant went to Madras in May 1996 to arrange for the pucca sale deed. A pucca sale deed is necessary before land can be transferred. It was to be obtained from the TamilNadu Housing Board. The pucca sale deed was obtained and a settlement in
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cash was arranged. The plaintiff was paid the balance of the Rs.60 Lakhs on 11 June 1996. He says he was not, but his memory is such that I cannot rely on his evidence in many respects. One of the defendant's three brothers, Jayasingh Gyanakkan, and his nephew, Jayasingh Rajhumar, told the source of the funds. It seems there was family property which had been developed. Mr Gyanakkan is a wealthy man who owns a large theatre. Within the theatre is a secure safe into which theatre takings are put. The proceeds of land sales are also kept there awaiting distribution to the brothers, including the defendant. When the defendant asked his brother for Rs 60 lakhs in cash, there was no difficulty in taking that sum from the safe and delivering it to the defendant. Mr Balasingh, a powerfully built young man went along for security. I have no reason to reject their evidence. Mr Gyanakkan in particular impressed me as a witness. It was argued that there were inconsistencies as to the surrounding events, such as where the money was in Mr Gyanakkan's house, and who physically counted it. The events occurred nearly seven years ago. Memory of irrelevant detail can fade. I would have been suspicious if their evidence had been exactly the same. 20 A receipt dated 11 June 1996 has been tendered. A lot has been said of it. It obviously has been typed on two different occasions. According to John Harry Houghton, a forensic expert, the type face is from the same typewriter. The first part is using an old typewriter ribbon and the second part with a new one. The defendant says the plaintiff prepared the document while they were in Madras. But is that likely? The plaintiff was staying with the defendant in his house although it seems he came and went a bit. There is no evidence he had an office. From 26 May to 8 June he stayed at the Ratan Tata Officers' Holiday Home, some 500 km travel from Madras. 21 The system in India is for documents such as this receipt to be typed on paper bearing a revenue print on the top. Such paper is purchased from revenue paper sellers. The purchaser has to identify himself and his name and the date are noted in pencil on the paper. Revenue paper sellers can be bribed to falsify the name or the date, but in the absence of evidence, such a finding should not be made. The revenue paper bears the date 27.5.96. It was purchased in Madras. It has the plaintiff's name on it. The defendant, using the power of attorney could have obtained the revenue paper in the plaintiff's name as it was a receipt for moneys to be paid by the plaintiff. Clearly the plaintiff could not have personally purchased it.
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22 The first part of the receipt refers to the deposit of Rs fifty thousand. It has a paragraph number (1) clearly typed in by the faded ribbon. Why would that number have been there unless it was expected that the same receipt was to include the balance? When the balance was to be paid the defendant may have had someone in his office type out the rest of the document. He denies having done that. Perhaps he did not. Perhaps it was the plaintiff who had it typed, although there is no evidence of how he could have done so. But he was not at the defendant's house on the night of 10 June 1996.
23 According to the defendant and his witnesses the plaintiff arrived in the morning and after being paid left again. That tends to give some credence to the defendant's evidence with respect to the receipt. The defendant said he spoke to the plaintiff on the telephone advising the balance of the purchase price was available. He said he asked the plaintiff to have a separate receipt for the balance. When the plaintiff told him he only had the one revenue paper, and it was too late to get another, the defendant said he told the plaintiff to put them both on the same revenue paper. The plaintiff denied these events, but the evidence of Mr Gyanakkan and Mr Balasingh throws some doubt on the plaintiff's recollection. 24 There are two revenue stamps at the foot of the receipt. The practice is to put such stamps at the end of the typing, presumably to prevent other typing being added. If the receipt was only a receipt for the deposit, why were the stamps not at the end of the first paragraph? They have been signed by the plaintiff. The plaintiff denies he signed them, but clearly, according to the evidence of Mr Houghton he has. His denial is I think a genuine reflection of his recollection, or rather lack of recollection of the events. 25 Whatever the mystery of the receipt, it does not effect my finding, based on the evidence of Mr Gyanakkan and Mr Balasingh that on 11 June 1996 the defendant paid the balance of the purchase price to the plaintiff. 26 The defendant negotiated settlements with the occupiers. In the absence of documentary evidence I do not accept he paid the sums he claims. Even if he had, it would not be recoverable from the plaintiff as the defendant did not rely upon the plaintiff's representations. 27 The defendant has not proved the reasonableness of any settlement with the occupiers. Expert evidence on the law in Madras was given by
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Mr Narayanan Nair. Despite some difficulty in reconciling it with the Madras City Tenants Protection Act, I accept his opinion that the occupiers, in particular Mr Narayanan, had a good case. But Mr Nair was not asked his opinion as to the settlements alleged by the defendant. They may have been reasonable, they may not. It is for the defendant to prove. He has not. 28 If, which I do not accept, the defendant had any claim against the plaintiff, I am not satisfied that it is any greater than the sum of Rs 8,21,691.,65 lakhs recorded in the book (exhibit 10). I will deal with that exhibit later in these reasons. These are payments the plaintiff has agreed to make. His agreement is an admission of liability. 29 It seems payments were made by Trump Housing Pvt Ltd. This is described by the defendant as his business. Although the evidence is a bit woolly, I think I would be satisfied that it is in substance the defendant's funds being paid to the occupiers. 30 The failure of the defendant to pursue any claim for the balance is inconsistent with his having a genuine claim. The documentary evidence of payments is only Rs 18,67,100 being made up of:
27.2.96 Narayanan Rs 5,00,000 lakhs 16.3.96 Narayanan Rs10,00,000 lakhs 24.2.96 Mani Rs 75,000 Undated Philomena Rs 2,00,000 lakhs 4.1.99- Philomena Rs 92.100 20.8.02 31 The defendant claims there were more cash payments as well. In the absence of some corroboration I do not accept the defendant's evidence. The defendant is unable to prove payments greater than Rs 18,67,100 lakhs. Even if the defendant could succeed in his counterclaim it would only be for the difference between what he can prove he has paid, and what the plaintiff has paid him – Rs 18,67,100 lakhs – Rs 8,21,691 lakhs = Rs 10,45,408.35 lakhs. 32 A further mystery in this case is provided by a small notebook (Exhibit 10). The notebook was the property of the plaintiff. In 1997 and 1998 the little book records various payments. The form of the book is to
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record in figures and words a sum of money in rupees. It does not describe what they are for. The defendant has signed them. The plaintiff says the defendant had not paid the balance of the purchase price and that these payments were on account of that purchase price. If that was the case, surely they would have been signed by the plaintiff as a receipt. The book was the plaintiff's. The defendant has signed for the money. I believe it records payments made by the plaintiff to the defendant. The defendant says he told the plaintiff of the money he paid to the occupiers and complained of the plaintiff's deceiving him about their status. He says the plaintiff agreed to pay. He said the plaintiff's agreement was somewhat sporadic; sometimes he said he would and other times he said he would not but sometimes it was to be in the future. 33 Exhibit 10 also records payment for airfares, a video camera, and some amounts recorded in US dollars and Australian dollars. There were payments made by the defendant to and on behalf of the plaintiff. They appear to have no relevance to this action. 34 The property market in Madras collapsed as evidenced by a newspaper clipping dated 27 July 1996 (Exhibit 9). May be the plaintiff agreed to pay some of the money back to the defendant because the defendant had missed out. May be the plaintiff believed the defendant had paid significant sums to the occupiers and agreed to reimburse. It does not prove that the defendant had paid such sums to the occupiers. The amounts are in rupees. The defendant says they were paid in Madras by the plaintiff's agent to the defendant's agent. That has a ring of truth about it. It would require the plaintiff to have funds in Madras. He said he left India because he could not afford to live there. He came to Australia with the object of working to earn sufficient to eventually retire back in Madras. It is unlikely he would have had funds in India. But if he had been paid the balance of the purchase price in cash in Madras, that would be consistent with his having funds there which would allow him to pay money to the defendant through their respective agents in Madras. The defendant says when he was advised of a payment, by telephone, he would go to the plaintiff's house and make an entry in the book. The book also records two items purchased by the defendant for the plaintiff. They are not of the same character as the other payments and do not need to be considered. 35 Some years later, by letter dated 1 July 1999 a demand was made by the plaintiff's niece for payment. She presumably had been told by the plaintiff he had not been paid. That was presumably his belief, but it does not prove he had not. The defendant rejected the demand. He did not
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refer to the payments made to the occupiers. Perhaps that is not surprising as the niece had not shown any authority to make the demand. 36 The next year on 16 August 2000 the defendant received a demand from a solicitor. He replied sending a copy of the receipt. The obvious differences in the type colour no doubt raised the suspicions of the solicitor. In his reply to the solicitor the defendant said, not only has he paid the plaintiff, but the plaintiff owed him money for airfares and accommodation. No mention is made of the in excess of Rs.50 Lakhs he now says he had to pay to the occupiers. In his evidence he said he overlooked it. That is simply not a credible explanation. 37 It is noteworthy that neither the plaintiff nor the defendant had taken any legal action until six years after the alleged breaches. If either had a genuine claim, it might have been expected somewhat earlier. The defendant had not initiated proceedings claiming damages for the very considerable sums he says he had to pay out to the occupiers. The amount of the counterclaim is coincidentally close to the claim. In his counterclaim he did not give any credit for the amounts in the little book. That is not the action of an honest man. The last payment in the book was on 20 July 1998. No further demands were made by the defendant to the plaintiff for any balance. 38 In the middle of the trial the plaintiff sought leave to amend its defence to counterclaim to plead the statute of limitations. In view of my decision as to the merits of the counterclaim the application is somewhat academic. 39 I would have allowed the amendment. It would have resulted in the counterclaim for breach of contract being statute barred, but the counterclaim based on the tort of deceit would not. 40 In the circumstances, I cannot see any difference in the way the trial would have been conducted and accordingly nothing turns on the late application to amend the defence to counterclaim. 41 For these reasons the claim and the counterclaim are dismissed.
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